Deutsche Bank disciplinary hearing pushed into next year

Deutsche Bank Securities Ltd. has lost a bid to stay disciplinary proceedings against the firm in connection with the sale of asset-backed commercial paper.

However, a panel of the Investment Industry Regulatory Organization of Canada said the proceedings will not start before Apr. 4, 2011, because of the “complexity of the allegations and the volume of materials to review in preparation for the hearing.”

IIROC alleges that the Deutsche Bank “conducted its business in a manner that failed to observe high standards of ethics and conduct and/or was unbecoming or detrimental to the public interest by failing to disclose certain information to its clients who had invested in or were interested in investing in third-party ABCP.”

The self-regulatory agency further alleges that the bank “failed to ensure proper
regulatory compliance oversight of third-party ABCP.”

Specifically, the allegations are that between July 25 and Aug. 13, 2007, Deutsche Bank “failed to act fairly, honestly and/or in good faith to its clients by not disclosing the information relating to US subprime and the liquidity risk in third-party ABCP to all of its clients who had invested or were interested in investing in third-party ABCP, while continuing to sell third-party ABCP to its clients.”